Generic Competitive Strategies

Porter describes a structure for evaluating the behavior of costs, the determinants of relative cost position, and the way firms can gain a sustainable cost advantage or minimize their cost disadvantage. The study also reveals the cost differentiation, and the ways a differentiated competitor can lower costs in the areas that do not undercut its differentiation. Porter also made a concrete proposal over the value chain and its connection to cost analysis. Porter said that "…

…- can be optimized, thus creating greater value and/or fewer costs. This way competitive advantage can be achieved. All in all, with the recognition of the value chain's claimed benefits and potential weakness stated above as well as some implementation issues, if the organizations can properly adopted the value chain theory, it may assist organizations to explore the role and contribution of its resources which would maintain sustainable competitive advantage in the long run.